The effects of social security expenditure on reducing income inequality and rural poverty in China

Social security has,as one of its primary aims,the provision of financial support to those deemed to be poor or facing the threat of poverty.Based on China's national statistical data covering social insurance,social assistance,and social welfare between the period 1978–2018,this paper evaluates the effect of social security expenditure in reducing income inequality and rural poverty with cointegration analysis.It was found that there is a positive correlation between social security expenditure and the income gap of urban and rural residents in the long run,but the effect is very limited;nearly 99%of the changes of the urban–rural income gap come from its own contributions.Further research also shows that the elasticity of rural poverty incidence to social security expenditure is–0.2255,which indicates social security expenditure helps reduce rural absolute poverty.Based on these findings,the policy implications can be that much social security expenditure and a more equitable social security system should be encouraged.It will become one of the major anti-poverty strategies after 2020 in China when we win the battle against absolute poverty.

Income inequality and growth from functional orientation and spatial policy:Case study of Tibet,China

Economic inequality and poverty are problemsexperiencedbymanycountries.Considerable attention has been paid to these issues in recent times.Studies on economic inequality have been characterized by geographical disparities and a lack of consideration of functional orientation.As one of the most typical and featured mountainous areas in Western China,Tibet demonstrates both the necessity and urgency of conducting studies on income inequality and growth issues.This paper proposes to address these problems by exploring the temporal and geographical variations in income inequality in Tibet,thereby revealing the differences in functional zones.Spatial Markov chains and panel regression analysis were applied to identify the spatial-temporal dynamics of income disparity.The results of this study show that(1)the overall income inequality in Tibet shows an expanding trend in the period 2005–2010 and a converging trend in the period 2010–2015,and there is a large disparity in income inequality between functional zones;(2)Tibetan farmers and herdsmen may face great difficulties in achieving substantial growth in the near future;(3)frontier counties,cultivated land,and grassland areas have negative impacts on income growth,while cordyceps counties,GDP per capita,agricultural product proportion,transfer payments,the ratio of nonagricultural employment to the total employment,the length of the average schooling year,and the slaughter rate of cattle and sheep have positive impacts;and(4)functional orientation has made great differences to income inequality and its mechanism.In light of these results,evidence-based policies have been formulated to boost average household income and narrow income inequality in Tibet.

Impact of Growing Income Inequality on Sustainable Development in China: A Provincial-level Analysis

A growing body of literature has documented the rapidly increasing Income disparities that accompanied China's economic growth in the 1980s and 1990s, and the driving factors behind this. Growing income inequality in its turn may have important implications for the accumulation of physical capital, human capital, and natural capital and as a consequence for sustainable economic development. The purpose of this paper is to investigate the potential impact of income inequality on savings, human resources and the environment in China. It starts with an overview of the different causal mechanisms through which income inequality may affect the accumulation of physical capital, human capital, and natural capital, and discusses to what extent these causal relationships may be relevant in the case of China. Next, provincial data for the year 2002 are used to explore the relationship between income inequality and different elements of sustainable development in China. It is found that income inequality does not affect aggregate savings levels. Rising inequality, however, contributes to lower health and possibly also to higher fertility levels. It also lowers the use of chemical fertilizers in agriculture and therefore is likely to reduce water pollution. Other types of environmental degradation are not affected.

Attitudes toward income inequality:perspectives from farmers living in a poverty-stricken rural area of China

The attitude of the least advantaged people to income inequality is important in regard to social stability,which is also a major concern of the government and researchers in China.This paper aimed to investigate the perceptions and attitudes of the least advantaged people toward income inequality in China.An empirical analysis was conducted on farmers' attitudes to income inequality based on a questionnaire survey of 308 farmers in four villages in Yingshan,Hubei Province.Our results show that the respondents consider the income inequality as severe,and ability,hard work,and individual choices are the major determinant factors of income.It is shown that farmers in less developed areas are more likely to accept income inequality,and they ascribe this to their own failure rather than to social injustice.However,it is not the case that people living in poverty-stricken areas are satisfied with antipoverty policies;and these policies are expected to be further improved to increase the income of the poor.

Income inequality and financial crises:evidence from the bootstrap rolling window

This study aims to investigate the validity of the Rajan hypothesis,which argues that increasing income inequality plays a key role in the outbreak of financial crises.The relationship between income inequality and credit booms are examined in 10 developed countries:Australia,Canada,Denmark,Finland,France,the United Kingdom,Japan,Norway,Sweden,and the United States.In doing so,a bootstrap rolling-window estimation procedure is used to detect any possible causal link between inequality and credit booms in financial crisis sub-periods.The results reveal that the Rajan hypothesis is supported for the 1989 crisis in Australia,the 1991 and 2007 crises in the United Kingdom,and the 1929 and 2007 crises in the United States.Therefore,increasing income inequality has positive predictive power on credit booms in Anglo-Saxon countries.However,the hypothesis is not confirmed for Scandinavian and continental European countries.Our study is novel in its use of the bootstrap rolling-window procedure,which allows us to detect the possible relationship between inequality and credit booms in financial crises.The findings suggest that a progressive taxation policy or investments to accumulate human capital and increase the labor force are more beneficial than temporary solutions.

Global Income Inequality and Poverty Reduction:Trends and Remedies

There is a global consensus that world economy need not only grow faster,but also grow in a way that the poor receive a greater share of the benefits of that growth.It is well documented that income inequality is on the rise,with the richest 10%earning up to 40%of total global income.The poorest 10%earn only between 2%and 7%of total global income.After long time of neglect,inequality has re-entered the mainstream development policy agenda at both national and global levels indicating that relevant policies should be universal in principle paying attention to the needs of disadvantaged and marginalized populations.As highlighted in almost all SDG’s documents,income inequality is a global problem that requires global solutions.This involves improving the regulation and monitoring of financial markets and institutions,encouraging development assistance and foreign direct investment to regions where the need is greatest.Facilitating the safe migration and mobility of people is also key to bridging the widening divide.SDG 10 encompasses 10 targets with the objective of promoting social,economic,and political inclusion of all,irrespective of age,sex,disability,race,ethnicity,origin,religion,or economic or other status.Achieving SDG 10 reaffirms that the 2030 development agenda will focus not only on eradicating poverty but also on tackling inequalities in all its forms through adopting sound policies to empower the bottom percentile of income earners,and promote economic inclusion of all regardless of sex,race,or ethnicity.This paper analyses the resent status of income inequality and its relationship with economic growth and poverty in selected developing countries.The paper highlights that there is a triangular relationship between income distribution,poverty and economic growth;while accelerated economic growth is a primary factor in reducing poverty,inequalities can constrain poverty reduction significantly.

Income Inequality in Mountain Areas: The Case of Agroforestry Farming Systems in Uluguru Mountains, Tanzania

Land degradation due to use of unsustainable agricultural practices has affected many communities in rural mountain areas rendering them to be more vulnerable to income poverty and inequality. In this case, agroforestry systems promise to offer great solutions as they can be developed in unfavourable conditions where other production systems would either rapidly degrade the land or otherwise would not be possible. However, little is known whether agroforestry can address issues of income inequality in mountain areas. Hence, we conducted a study to investigate the nature and determinants of income inequality in Uluguru Mountains, Tanzania. Specifically, we used the cross-sectional research design and we calculated the income percentile shares, Gini coefficients and the coefficient of variation (CV), to pinpoint the nature of income inequality in the study area. The determinants of income inequality were analysed using the step by step multiple linear model. The results of analysis suggested prevalence of income inequality. Crop production was the main source of income in the agroforestry systems of the study area. Earnings from crops and timber were decreasing income-inequality amongst smallholder farmers. Our disaggregated analysis showed that off-farm income was also decreasing income-inequality for farmers with farmlands located close to homestead, for female-headed households, for farmers who did not access extension services, and those who were members of community-based financial institutions. Estimated incomes increased with household assets, size of farmland, and age of household head. However, the same decreased with household size. We found gender disparity to be one of the key issues that need attention in formulating future policies to reduce inequality. We recommend promotion of livelihood diversification as well as the designing and implementation of tailor-made training and farm financing mechanism to help the less resource-endowed farmers in mountain areas to raise their economic portfolios and social status and combat income poverty and inequality.

Effects of Public Transfers on Income Inequality and Poverty in Rural China

This study examines the impacts of public transfers on income inequality and poverty reduction in rural China.It uses nationally representative rural household surveys from the China Household Income Project and classifies public transfers into threetypesuniversal,pro-poor,and reimbursable transfers-to compare the impacts of eachtype of public transfer in 2013and 2018.Estimated results show that the contributions of eachtypeof publictransfertoreducing incomeinequalityweregenerally small in both 2013 and 2018.However,the effects of reimbursable transfers were the largest of the three types.We also found that the poverty-reducing effects were the largest for reimbursabletransfers,and their impactshaveconsiderably improved inthewestern region.The impacts of pro-poor transfers were intermediate but have developed notably in the central region.These findings suggest that reimbursableand pro-poortransfers contributed mainly to reducing rural poverty but the impacts were heterogeneous among regions.

Chinese decentralization and income inequality between urban and rural residents--An empirical study based on the dual dimensions of internal and external budget

The paper firstly explains the mechanism of decentralization on income inequality from two theoretical dimensions of internal and external budget.Based on the re-measurement of income Gini coefficient and Chinese decentralization level,this paper establishes panel data model from national and regional perspective to empirically investigate the impact of Chinese decentralization on income inequality between urban and rural residents.Firstly,the promotion of budgetary income decentralization is conductive to reduce income inequality of urban and rural residents whether it is from the national or sub regional.Second,although the promotion of budgetary expenditure decentralization exacerbates the urban-rural income inequality in the national level,it could obviously reduce the urban-rural income inequality in the midwest with relatively low level of budgetary expenditure decentralization.Thirdly,the impact of extra-budgetary decentralization on income inequality is consistent,no matter in the whole country,in eastern or in western regions.This means that the extra-budgetary income decentralization makes the income inequality between urban and rural residents worse while the extra-budgetary expenditure decentralization reduces the income inequality between urban and rural residents with different degrees.Fourthly,the transfer payment,years of schooling and urban unemployment rate are conductive to narrow the income inequality between urban and rural residents while the impacts of economic development,urbanization and opening degree are obviously different in different regions.The above conclusions can not only be used for reference to further perfecting and reshaping the fair efficiency mechanism of Chinese decentralization,but also indicates the direction of the new fiscal and tax system reform.

The effects of FDI inflows on income inequality:Evidence from OECD countries

Income inequality is a concerned topic that attracts academia studies for many reasons.Among the long list of factors offered by scholars that contribute to income inequality,the impact of globalization has been extensively studies.This study uses a three-step analysis to examine the influence of Foreign Direct Investment(FDI)inflows on income distribution for Organization for Economic Cooperation(OECD)countries through panel data analysis techniques.FDI flows into OECD countries are generally driven by high skilled works.FDI inflows to OECD countries increase GINI coefficients and widen income gaps due to their skill-intensive nature.A high level of education should be encouraged as indicated by its negative relationship with the GINI index.

Does Chinese Environmental Policy Affect Income Inequality? Evidence from the Central Environmental Protection Inspection

This paper investigates the effect of environmental policy on income inequality.It focuses on the central environmental protection inspection led by the central government in China.Using a diference-in-diferences approach,it finds evidence that environmental regulation decreased the per capita income and enlarged the gap between urban and rural income while showing an insignificant effect on employment.Although the policy can reduce pollution levels and bring environmental benefits in aggregate,the findings of this study suggest that the regulations appear to have reduced the proportion of manufacturing industry and hindered general innovation and investment from entrepreneurs,which resulted in greater inequality.Rural residents suffered more from environmental regulation due to relatively high migration costs and their disadvantaged human resources on the aspects of health,education level,and skills.The local government's execution incentive can also play a key role in the effectiveness of environmental policy.Regions with lower GDP growth targets and younger government leaders were affected significantly with regard to the income growth of local residents and the urban-rural income gap.

E-commerce and Consumption Inequality in China

Consumption inequality may impede economic development and hinder the achievement of common prosperity.Using three waves of the China Family Panel Studies from 2014 to 2018,this paper investigated the impact of e-commerce on consumption inequality,as measured by the Kakwani index.The results indicate that e-commerce can reduce household consumption inequality.A mechanism analysis shows that e-commerce can narrow household income inequality,increase the purchasing power of low-income households,and promote the consumption of households with limited access to ofline markets,thereby reducing the consumption gap.A heterogeneity analysis suggests that the positive role of e-commerce in reducing consumption inequality can be more significant among vulnerable households,such as households with elderly members and less-educated households.E-commerce can have varying impacts on consumption inequality across different subcategories of household expenditure,with the greatest impact seen in entertainment and education expenditure.These findings provide new evidence for the role of e-commerce in reducing consumption inequality in the digital economy,and the implications of this are discussed.

Intra-family Income Redistribution and Its Dynamic Changes among the Elderly in China:2002-2018

This paper studies the impact of household income redistribution on income inequality among the elderly from 2002 to 2018. It defines shared income and measures how each family member's contributions affect income inequality among the elderly. The study has three major findings. First, from 2013 to 2018, the role of household shared income in reducing income inequality among the elderly increased. Second, the proportion of shared income contributed by children was the highest overall, reaching 11.0 percent nationwide and even 17.9 percent in rural areas in 2018. The contribution of shared income to inequality was also higher among the rural elderly. Grandchildren under 16 largely received shared income from the elderly, and the income transferred by the male elderly to their wives was obvious. Third, changes in family structure narrowed the inequality gap among the elderly in the periods 2002–2013 and 2013–2018.

Fair and unfair inequality in China

The paper questions the normative value in the Chinese case of standard measures of aggregate income inequality such as the Gini coefficient.Evidence is adduced that people have narrow frames of reference and that they distinguish between income inequalities that they perceive to be fair and those that they perceive to be unfair.It is suggested that value judgements about what is fair or unfair can be guided by people’s own perceptions.People’s perceptions of unfairness can also be important to a government concerned to avoid social instability.The estimation of happiness functions can help to make the relevant distinctions.Examples are given of how fair and unfair inequalities might be identified,using either a criterion of people’s perceptions or one of informed judgements.Unfairness might be more strongly felt in inequalities of economic power than in inequalities of income,although the former can in turn result in inequalities of income.An argument is made for China researchers to extend inequality research and research instruments towards an economics of fairness and unfairness.

Evaluating the Redistributive Effect of Social Security Programs in China over the Past 30 Years

China has improved its social security system in recent decades,with the aim of achieving universal coverage and improving the equity of income distribution.Based on data from the five rounds of Chinese Household Income Project surveys from 1988 to 2018,this paper examines the long-term redistributive effects of social security programs in China.Our results show that social security programs have reduced income inequality consistently,and the positive redistributive effects have been improving for the past 30 years.Social security transfers have had an increasingly essential role in rural areas,especially after 2002 when China started to establish a comprehensive rural social safety net and expanded the coverage of the social security program.The redistributive efficiency of the social security system has also increased recently.